Abcdefghij

saver776

Abcdefghij

[Deleted User]

Hi,

because interest rate is not fixed.

bowlhead99

Sometimes they offer products with fixed term, fixed rate returns, such as their 'guaranteed growth bonds' or 'guaranteed income bonds' which are still available to people who have an old product maturing..

The normal Income Bonds are not guaranteed to keep their interest rate until a specific maturity date. The rate can change from time to time. So if you wanted a 'guaranteed return' you could go elsewhere and get a fixed term product with a set interest rate that couldn't change before maturity.

datostar

I'd suggest they're not really suitable for anyone seeking compound interest over the long term either. They are income bonds with interest paid monthly. Invest £50000 and you'll still have a balance of £50000 a year later (albeit having had 1/12 of 1.16% interest paid to you monthly.

blue_max_3

datostar said:

I'd suggest they're not really suitable for anyone seeking compound interest over the long term either. They are income bonds with interest paid monthly. Invest £50000 and you'll still have a balance of £50000 a year later (albeit having had 1/12 of 1.16% interest paid to you monthly.

You could reinvest the interest if you can make it up to the £500 minimum. But I take your point.

dave1345

blue_max_3 said:

datostar said:

I'd suggest they're not really suitable for anyone seeking compound interest over the long term either. They are income bonds with interest paid monthly. Invest £50000 and you'll still have a balance of £50000 a year later (albeit having had 1/12 of 1.16% interest paid to you monthly.

You could reinvest the interest if you can make it up to the £500 minimum. But I take your point.

I have the interest paid in to a Direct Saver with NS&I so that it in turn also earns interest.